South Korea’s foreign trade surplus drops 7 pct in 2012

SEOUL - Agence France-Presse

People pass by sale banners in downtown Seoul, South Korea. AP photo

South Korea’s trade surplus in 2012 shrank 7.1 percent to $28.6 billion in 2012, data showed yesterday, as exports were hit by shrinking demand in the key European market.

Overseas shipments fell 1.3 percent to $548.2 billion last year, while imports slipped 0.9 percent to $519.5 billion, the Ministry of Knowledge Economy said.

The 2012 trade surplus figure is down from $30.8 billion in 2011 and well off the $41.2 billion in 2010, it said.

In December alone, exports fell 5.5 percent from a year ago to $45.1 billion and imports retreated 5.3 percent to $43.07 billion.

Shipments to Europe in 2012 plunged 12.5 percent year-on-year to $47.6 billion, while exports to top destination China, which suffered a slowdown in growth during the year, fell 0.1 percent to $130 billion.
The numbers come a day after official figures showed inflation slowed to a four-month low of 1.4 percent in December, giving the central bank leeway to loosen monetary policy to boost economic growth.

Bank of Korea policymakers left the key interest rate unchanged at 2.75 percent in a meeting last month, after trimming it twice throughout the year.

South Korea’s economy expanded at its slowest pace in three years in the three months to September, hit by falling demand overseas, with Europe gripped by a debilitating debt crisis. The government has warned that 2013 will likely be equally tough.